ALBUQUERQUE, N.M. (AP) — The New Mexico Finance Authority, which makes billions of dollars in loans for public projects, faked its annual audit that was sent to creditors and investors for 2011, the state auditor said Thursday.

The revelation shocked state officials and raised questions about both the potential fallout and what the false document might have been trying to hide.

"I don't know because we have never seen anything at this scale," said Antonio Corrales, director of operations for State Auditor Hector Balderas. "But if creditors come back and take those loans (that were made based on faked audit results), I don't know if ... insurance would cover it if it was provided under false pretenses. It could be huge."

In a press release announcing the findings, Balderas said he was "moving aggressively to determine the full extent of this fraud perpetrated against New Mexico's taxpayers."

"I'm extremely concerned that a report was fraudulently created in order to misrepresent the Authority's financial condition to agencies, investors and the public," he said.

Balderas office did not release any more information about what might have been misrepresented in the faked audit, and it declined to release its report on the matter because it is under investigation by law enforcement and other entities.

Balderas said he discovered the fake audit after the NMFA failed to submit its annual review as required by law.

He says a fraudulent audit report had been produced for investors and creditors, but the firm that supposedly created that document has confirmed it is not their work.

Richard May, CEO of the finance authority, called the matter "deeply concerning" but insisted it would have no effect on NMFA's ability to meet its financial obligations.

"NMFA remains financially strong and has ample resources to meet all scheduled bond payments and other expenses," he said in a statement.

May blamed the authority's former controller, who left in June, and said NMFA has taken steps to rectify the issues as quickly as possible. Officials declined to release the former controller's name.

May said NMFA has alerted ratings agencies, investors, public officials and law enforcement authorities.

"We are committed to the absolute integrity of our operations, we are cooperating fully with all reviews, and our Board intends to communicate the findings of the independent investigation into this matter as soon as possible," May said.

May said NMFA has hired the international accounting firm KPMG to do a complete audit and forensic investigation. Additionally, he said, an outside law firm, Steptoe & Johnson, has been hired to determine how the misrepresentation occurred.

The NMFA was created by the Legislature in 1992 as an entity separate from the state to make low cost loans to governments for capital and infrastructure projects. Among the projects funded by the NMFA is New Mexico's Rail Runner commuter train that runs between Albuquerque and Santa Fe.

The NMFA is governed a board of 12 directors, 10 of whom are appointed by the governor and four of whom are cabinet secretaries.

A spokesman for Gov. Susana Martinez said she was deeply concerned about the faked audit and had called on NMFA to work closely with the state auditor and law enforcement "to ensure that no stone is left unturned in determining what happened."